An Australian party system had begun to develop during the last years of the colonial period in the 1890s, to the extent that most seats in the first Commonwealth Parliament were won by candidates from just three major groups, one of which was the Australian Labor Party. The outline of the modern system could be seen by 1910 following the fusion of two non-Labor parties in opposition to Labor. In 1919 the Country Party won a significant number of seats, and by 1923 it had joined the major non-Labor party in the first of many conservative coalition governments. Today the party battle at the Commonwealth level and in New South Wales, Queensland, Victoria and Western Australia is dominated by the contest between Labor and the Liberal and National (formerly Country) parties. In South Australia, Tasmania and the Australian Capital Territory the major contest is between the Liberal and Labor parties, while in the Northern Territory the Country Liberal Party opposes the Labor Party.

Many minor parties have contested House of Representatives and Assembly elections, but only in Tasmanian House of Assembly and Australian Capital Territory Legislative Assembly elections has the dominance of the major parties been threatened on occasion by minor parties and independents. The use of proportional representation for most of the upper house elections has given minor parties and independents a realistic chance of winning Senate and Legislative Council seats. Since 1980 the major parties have controlled the Senate and Legislative Councils only intermittently.

Parties and Parliament

Australian parliaments have thus been dominated by the tightly controlled parties since the early 20th century. This has been the key factor in a decline in the significance of parliament relative to that of the executive.

The impact of parties can especially be seen in the operations of each parliamentary house, particularly in the legislative process. Opposition parties spend much time criticising governments and legislative amendments are often moved. However, because governments usually enjoy a majority in these lower houses, questions may be avoided, amendments cannot be forced, and whether or not opposition views are accepted depends on the wishes of the government of the day.

It has been a different story whenever the Senate and the Legislative Councils have not been controlled by government, for the upper houses are powerful and all can alter or reject government legislation. When a government controls an upper house, however, that body's influence upon legislation tends to decline. For example, with the coalition Commonwealth Government controlling both national houses from July 2005, the Senate's impact on legislation has lessened significantly.